Billionaire Leon Cooperman: Facebook Inc (FB) Is a Value Play

The interesting thing about LinkedIn is that it has some of the lowest hedge fund interest, with its top hedge fund managers being little-known. The top fund owner at the end of 2012 was Columbus Circle Investors. In second place was Conatus Capital Management (see all of LinkedIn’s hedge fund owners).

By the numbers

On the surface (from a forward P/E perspective) LinkedIn Corp (NYSE:LNKD) appears to be the most expensive stock of the three, trading at 85 times forward earnings, compared to Facebook’s 35 times and Google’s 16 times. However, when accounting for the respective companies’ future growth expectations, LinkedIn is impressive. Analysts expect LinkedIn to grow EPS at an annualized 58%, compared to Facebook’s 29%.

Of course Cooperman makes the case that it is quite possible that analysts and investors are not fully appreciating the growth that mobile will bring to Facebook’s earnings. Even still, it’s hard to ignore the fact that LinkedIn has a return on equity of 4.5%, nine-fold Facebook’s 0.5%.

Don’t be fooled

Although I can agree with billionaire Leon Cooperman’s Facebook Inc (NASDAQ:FB) thesis, I also think it is worthwhile to take a look at LinkedIn. LinkedIn appears to have a first-mover advantage in its respective social network niche. Google, although its current presence in the social network space with Google+ is still minimal, does has a stronghold on the search market. As a result, it would be worthwhile to take a look at this search giant, which also has stakes in mobile OS (Android) and tech hardware (Motorola, Google Glass, etc.). Google trades well below the other stocks listed and has a solid 15% annualized expected EPS growth rate over the next five years according to analysts.

Meanwhile, although LinkedIn appears to be more expensive, the fact that LinkedIn is expected to grow nicely is encouraging. I believe that LinkedIn has the ability to retain and engage users, compared to Facebook Inc (NASDAQ:FB), and will better reward investors over the long-term.

The article Billionaire Leon Cooperman: Facebook Is a Value Play originally appeared on Fool.com and is written by Marshall Hargrave.

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